ivan

2 Comments

    • The Dance of the Elephant: India in Action [view article]
      What I was implying is that people are confident and there is a general air of optimism because there is so much talk of India becoming a "superpower" due to it's economic growth etc. The performance of the stock market and real estate market has helped too.

      You are right, we both agree that long term things should work out. Basically your 4 to 5 years horizon is closer to "short term" for me but I guess it is long enough for you.       Apr 19 02:29 PM
    • The Dance of the Elephant: India in Action [view article]
      I have never posted my thoughts before, but here goes:

      I think the author is making a mistake assuming that since the mood of the people is bullish, the indian stock market is going to do well in the near term till at least 2012. Warren Buffett once said something to the effect that most investors always make the mistake of doing "rear-view mirror" investing, i.e. look at what happened before and project it into the future instead of looking to see what's ahead.

      Looking ahead, what I see in India is:
      Inflation
      High interest rates to try and dampen inflation
      Falling corporate profits
      Populist government policies (due to upcoming general elections)
      Political uncertainty (I expect a hung parliament and horse-trading after the elections)

      So, short term I don't see how the Indian markets are going to perform well, unless there is irrational exuberance, in which case, it will just postpone the inevitable bursting of the bubble.

      Longer term though, in the greater than 10 year time frame, I am bullish on the Indian economy.

      It will be fun to see how things actually turn out! :)       Apr 18 07:21 PM
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